Yen and Dollar remain resilient as markets await key US payrolls data

Yen, Dollar steady: The Japanese Yen and the US Dollar held steady, while riskier currencies such as the British Pound and Australian Dollar struggled on Wednesday as investors sought refuge following sell-off on Wall Street, the largest in nearly a month.

The market's unease was triggered by weaker-than-expected US manufacturing data, raising concerns about a potential economic slowdown. Traders are now looking ahead to Friday's crucial payrolls report for further direction.

Yen gains, Dollar stable

In early Asian trading (2249 GMT), the Yen strengthened by approximately 0.1%, reaching 145.325 per Dollar, following a 1% gain overnight against a generally stronger Dollar. 

The US Dollar remained stable at $1.1046 per Euro  after a 0.26% rise on Tuesday, and was unchanged at $1.3111 against the Pound after a 0.23% increase.

The Australian Dollar saw little movement at $0.67135 after a 1.2% drop the previous day.

In light of recent developments, traders have increased the likelihood of a 50 basis point Federal Reserve rate cut on September 18 to 38% from 30% a day earlier, according to CME Group's FedWatch Tool.

"Markets are jittery ahead of Friday’s crucial non-farm payroll report, which is expected to play a significant role in determining whether the Fed will cut rates by 25 or 50 basis points," commented Gavin Friend, Senior Markets Strategist at National Australia Bank.

"The movement in assets reflects a risk-averse stance and a preference for safe-haven currencies, as investors pull back," he added.

Manufacturing shows modest improvement

While a gauge of US manufacturing slightly improved from an eight-month low in July, indicating better employment figures, the overall trend continues to signal muted factory activity. Economists predict that Friday’s report will reveal an increase of 165,000 jobs in August, up from 114,000 in July.

Before the payrolls report, attention will also be on job openings data released Wednesday and the jobless claims report on Thursday.

(With Reuters Inputs)